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Risk Velocity and Financial Markets Performance: Measuring the Early Effect of COVID-19 Pandemic on Major Stock Markets Performance

Author

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  • Musaed S. AlAli

    (Assistant Professor, College of Business Studies Department of Insurance and Banking, The Public Authority for Applied Education and Training (PAAET), Kuwait)

Abstract

Capital is coward, money tend to flee the markets during crises periods. In just few days after declaring Coronavirus as a pandemic by the World Health Organization (WHO), major stock markets lost more than 15% of their market capitalization. This study aims to examine the velocity of Coronavirus pandemic effect on major stock markets during the early stages of the pandemic. The study also examines whether or not there was any difference before and after the first confirmed Coronavirus case reported. Using the data on eleven major stock markets, results from this study shows that, out of the eleven markets under study, six markets showed no difference in mean return 30 trading days before and after reporting the first Coronavirus case in these countries. The results also showed that WHO announcement had a more impact on the stock markets performance than the announcements of local health authorities’ announcements. One interesting finding in this research is that there was an inverse relation between the distance of the stock market from Wuhan and the financial performance of that market.

Suggested Citation

  • Musaed S. AlAli, 2020. "Risk Velocity and Financial Markets Performance: Measuring the Early Effect of COVID-19 Pandemic on Major Stock Markets Performance," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 6(4), pages 76-81, 04-2020.
    • Handle: RePEc:arp:ijefrr:2020:p:76-81
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    Citations

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    Cited by:

    1. Francis Kuriakose & Deepa Kylasam Iyer, 2024. "Initial conditions and cross-country macroeconomic impact during Covid-19," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 19(1), pages 4-27.
    2. Herjuna Qobush Izzahdi & Ani Wilujeng Suryani, 2023. "COVID-19 Vaccination, Government Strict Policy and Capital Market Volatility: Evidence from ASEAN Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 117-135.
    3. Mubarok, Faizul & Al Arif, Mohammad Nur Rianto, 2021. "Pandemic Attack and Islamic Stocks Index: A Cross Country Analysis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 55(1), pages 27-37.
    4. Hassanudin Mohd Thas Thaker, 2023. "COVID-19, Mobility, and Stock Markets Performance - Evidence From ASEAN-5," Asian Economics Letters, Asia-Pacific Applied Economics Association, vol. 3(4), pages 1-6.
    5. Helder Marcos Freitas Pereira & Maria Sylvia Macchione Saes, 2022. "Government Support and Institutions’ Intermediation throughout Companies’ Adaptation to the COVID-19 Crisis," Sustainability, MDPI, vol. 14(9), pages 1-16, May.

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